Walmart (WMT) saw major upsides to consistent sales growth, as outlined in its fourth-quarter earnings beat. Home Depot (HD), on the other hand, cited sales declines and a weakened full-year outlook in its latest earnings results. Are the earnings performances of these major retail chains indicative of any trends seen in the US consumer?

D.A. Davidson Managing Director and Senior Research Analyst Michael Baker joins Yahoo Finance to discuss consumer resiliency seen across the past year.

"It seems like the idea of a recession is a little less on the table now than it was because consumer spending was pretty strong throughout 2023. Slowing certainly from the pandemic years but held in pretty strong," Baker explains. "Walmart had a pretty strong holiday season. Home Depot remains negative and that's more a function of, I think, housing trends but less negative than they have been. We're sort of leveling off... in terms of consumer spending."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

- We've also got some insight into the state of the consumer this morning with Home Depot and Walmart results out before the bell. Now, we heard some consistent themes from both companies that we heard throughout 2023. A more choice for consumer pulling back from big ticket purchases but still consistently spending. For more on this, we turn to Michael Baker-- D.A. Davidson managing director and senior research analyst. Good to have you on the show here.

So walk us through what we're seeing and what these earnings are telling us about the state of the consumer and what they're still willing to spend on.

MICHAEL BAKER: Yeah. The consumer is resilient. And in fact, maybe even a little bit better than we thought a year ago. If you recall about a year ago, there were concerns that 2023 was going to be a recessionary year. I think the odds were from a number of economists that we would fall into a recession. And of course, that hasn't happened now. Who knows what happens in the future?

But it seems like the idea of a recession is a little bit less on the table now than it was because consumer spending was pretty strong throughout 2023. Slowing certainly from the pandemic years but held in pretty strong, Walmart had a pretty strong holiday season. Home Depot remains negative. And that's more a function of, I think, housing trends. But less negative than they have been. So we're sort of leveling off, I think, in terms of consumer spending.